Microchip is a leading manufacturer of microcontrollers, most famously the PIC series of micros that can be found in any and every type of electronic device. Atmel, likewise, also has a large portfolio of microcontrollers and memory devices that are found in every type of electronic device. Engineers, hackers, and electronic hobbyists are frequently sided with Microchip’s PIC line or Atmel’s AVR line of microcontrollers. It’s the closest thing we have to a holy war in electronics.

We find it interesting that the article mentions Maxim doesn’t need to scale — yet we often find Maxim parts in short supply. If TI were to acquire the company this could change for some Maxium parts. Still, this move looks a lot like TI trying to bolster its hold on the portions of the analog chip market which both companies currently occupy.

The deal between Dialog and Atmel is not very big; the combined revenue of both companies should be $2.7 Billion, not even in the top-20 semiconductor companies by revenue. However, Atmel is an extremely big player in the Internet of Things and the nebulous ‘maker’ market. Dialog’s portfolio is complementary to Atmel’s, focusing on mobile platforms such as smartphones, e-readers, and tablets. The future is in the Internet of Things, and Dialog wants to get in on the ground floor.

Dialog’s current portfolio is focused mainly on mobile devices, with Bluetooth wearables-on-a-chip, CODEC chips for smartphones, and power management ICs for every type of portable electronics. Atmel’s portfolio is well-established in automotive, smart energy metering, and the maker movement. While the Arduino may be Atmel’s most visible contribution to the industry, the Arduino itself is just a fraction of Atmel’s sales in this space. Atmel parts can already be found Internet of Things products like the LightBlue Bean (an 8-bit AVR), and the Tessel 2 Internet of Things board (a 32-bit Atmel ARM).

Curiously, neither Dialog nor Atmel have many sensor or MEMS products, and the future of wearables, portable electronics, and the Internet of Things will depend on these sensors. STMicroelectronic produces both the microcontrollers and sensors that are packed into phones. TI is nearly a full-stack hardware company, able to produce everything that will go into a wearable or Internet of Things device, all the way from the power regulator to the microcontroller. Although this may be seen as a shortcoming for Dialog and Atmel, both companies combined are still many times smaller than the likes of Avago/Broadcom or NXP/Freescale there’s plenty of room for more acquisitions to round out their future needs.

As for what changes will come to Dialog and Atmel’s portfolio, don’t expect much. Unlike the NXP and Freescale merger where both companies have a lot products that do pretty much the same thing, the portfolios of Dialog and Atmel build on each other’s strengths. You’ll have your 8-bit AVRs for a few more decades, and with Dialog’s focus on connectivity, we can expect even more tools for building the Internet of Things.